THE BLOG

04
Apr

Open a California Car Title Loan Business

Posted by / California

How to Open a Car Title Loan Company

For both car title loan lenders and their customers: California

Exercise caution before borrowing money via an automobile title loan.

Title loans require the borrower to sign over the title (pink slip) to your car, RV, motorcycle, boat, mobile home as collateral for your title loan.

If you miss payments or default on your car title loan, the lender can take your vehicle.

Tips for consumers considering an auto title loan:

  • Borrow only as much money as you can afford to fully repay when the payment is due.
  • You have the right to full disclosure in your contract of all interest charges, the annual percentage rate (APR) of the loan and all fees.
  • The final contract must be in the language in which you negotiated it.
  • Before you take out a title loan, read the contract thoroughly and be sure you understand all the terms.
  • Once the title loan agreement is signed, you are legally responsible to fulfill the obligations in the contract.
  • Be aware some title loan lenders use remote engine shutdown devices that allow them to turn off your car if you don’t make payments. Some of these devices have GPS tracking capability.
  • These car starter interrupt devices must be disclosed to the borrower.
  • Car title loans are quick and easy to obtain but borrower’s will “pay through the nose” to get one.
  • Borrowers should reach out to family, friends, peers, church, their employer… all possible alternatives before getting a car title loan. Of course, who really wants to disclose their temporary financial hardship to anyone but a car title loan professional? NO ONE!

Examples of car title loan alternatives include asking your employer for an advance on your next paycheck; finding out if your bank or credit union provides short-term credit products; asking creditors for more time to pay your bills; asking for a loan from a relative or friend.

Auto title loans typically are advertised as short-term loans for people who need money quickly but may not have access to more conventional loans, due to temporary financial challenges and low credit scores.

Few assets are more important to Californians’ financial security than their cars.

Borrowers who use their auto titles as loan collateral are risking that asset.

Car title lending can be VERY profitable for the lenders. APR’s exceed 100% per year.

Car title loans are an expensive solution for borrowers in financial straits.

The amount of these loans is always less than what the car is worth. Smart car title loan lenders only loan a maximum of 50% of the “low Book value” of the car.

WARNING: IN CALIFORNIA – AND MOST STATES – FOR ALMOST ALL AUTO TITLE LOANS, THE INTEREST RATE LENDERS CAN CHARGE IS UNLIMITED.

CAR TITLE LOANS ARE A LOAN PRODUCT OF LAST RESORT FOR BORROWERS.

Current California state law does not limit interest rates for consumer loans of $2,500 or more. [CFL License.] This includes car title loans.

Last year, nearly 100 percent (99.99 %) of auto title loans equaled or exceeded that $2500 threshold.

The APR (annualized interest rate) on the vast majority of car title loans was 70% to 100% plus.

Title Loan Business

Start a Title Loan Business

Title loan lenders who follow the “Best Practices” discussed in our “How to Start a Car Title Loan Business” will disclose ALL fees, interest rates, add-ons… to the borrower before the title loan is consummated. [You want to learn how to make money with a car title loan business? Click here.]

Car title loan borrowers should carefully review the terms of the loan BEFORE signing the title loan contract.

Always check with the California Department of Business Oversight on a company’s license BEFORE entering into an agreement for an auto title loan.

www.dbo.ca.gov 1-866-275-2677

 

01
Apr

Starting a Car Title Loan Business

Posted by / How to Start

Starting a title loan business in California?

You want to start a title loan business? Need the basics? What can you charge title loan borrowers in fees and interest? How do car title loans work?

How to Start Title Loan Biz

How to Start Title Loan Biz

(This piece is focused on starting an auto title loan business via the Internet or a store-front in Calififornia. As an entrepreneur contemplating a title loan business startup, know that they are legal in roughly 20 states and we have the license applications, sample contracts and documents, and access to the laws in each state.)

Inspired by a consumer advisory from the California Department of Business Oversite, this Post does a good job of providing California car title loan startup entrepreneurs with the basics about title loan, pink slip loans, auto equity loans…

What’s a car title loan?

Title loans are called many names. Here’s a few auto title loan terms used by consumers to discover a title loan lender:

  • Pink slip loans
  • Auto title loans
  • Automobile title loans
  • Car equity loans
  • Auto equity loans
  • Cash for car title loans
  • Title loans
  • Auto collateral loans
  • Whatever you want to call them…

Basically, car title loan lenders loan money to a borrower in return for the title to the borrower’s car. The borrower is allowed to keep possession of the car and continue to drive it. We charge the borrower whatever we wish for lending the borrower our money. In our California stores, we charge 60% to 120%+ for our loans. (Typically, 8% – 18% per month on the outstanding loan principal.)

If the customer fails to pay us on time AND fails to contact us AND fails to make ANY effort to work with us, we repossess their car. We have it picked up by an independent service. We have the car delivered to the auction. The car is sold at the auction. We deduct our costs, fees and interest from the monies received from the auction company. Any remaining balance is mailed to our borrower.

Title loan Advisory by California Department of Business Oversite

1st, The CDBO advises “caution before borrowing money through an automobile title loan.”

  • Title loans require you to offer your car as collateral for your loan.
  • If you miss a scheduled payment your title loan lender can reposses your vehicle.

Tips for consumers considering an auto title loan:

  • Borrow only as much money as you can afford to fully repay when the payment is due, which may be less than the amount you may be eligible to receive.
  • You have the right to full disclosure in your contract of all interest charges, the annual percentage rate (APR) of the loan and all fees. The final contract must be in the language in which you negotiated it.
  • Before you take out a loan, read the contract thoroughly and be sure you understand all the terms.
  • Once the loan agreement is signed, you are legally responsible to fulfill the obligations in the contract.
  • Be aware some lenders use remote engine shutdown devices that allow them to turn off your car if you don’t make payments. Some of these devices have GPS tracking capability.
  • Although these loans are quick and easy to obtain, you pay higher prices for the convenience.
  • ABOVE ALL, CONSIDER AVAILABLE ALTERNATIVES. Examples include asking your employer for an advance on your next paycheck; finding out if your bank or credit union provides short-term credit products; asking creditors for more time to pay your bills; asking for a loan from a relative or friend.

Auto title loans typically are advertised as short-term loans for people who need money quickly but may not have access to more conventional loans often due to poorcredit scores.

From the California Department of Business Oversight:

“Few assets are more important to Californians’ financial security than their cars. Borrowers who use their auto titles as loan collateral are risking that asset. That’s why we strongly urge
consumers to exercise great care before taking out an auto title loan, and to try other options first. The amount of these loans typically is less than what the car is worth.”

WARNING: FOR ALMOST ALL AUTO TITLE LOANS, THE INTEREST RATE LENDERS CAN CHARGE IS UNLIMITED.

THIS SHOULD BE A LOAN PRODUCT OF LAST RESORT.

“Current California CFL License holders state law does not limit interest rates for consumer loans of $2,500 or more. The annualized interest rate on the vast majority of these loans ranged from 70% to 100% and higher. Even if you don’t have the protection of interest rate limits, the law requires lenders to deal with you fairly and honestly. That means they must fully inform you about the interest you will pay.”

“Carefully review the terms of the loan BEFORE you sign a contract! Always check with the Department of Business Oversight on a company’s license BEFORE entering into an agreement for an auto title loan. www.dbo.ca.gov 1-866-275-2677.”

ATTENTION ENTREPRENEURS: You want to start a car title loan business? Start Here!

How to Start a Loan Business

HOW TO START A TITLE LOAN BUSINESS

01
Apr

Arizona Car Title Loans: CONSUMER LENDER LOANS FINTECH

Posted by / Arizona

Title loan companies are still specifically included in this new Arizona Fintech Consumer Loan law.

These lenders are the successors to payday loans, who lend small sums of money at relatively high interest rates using the customer’s vehicle as collateral.

Title loans are specifically included in this new bill.

Arizona:

ARIZONA CHAPTER 55
35 REGULATORY SANDBOX PROGRAM
36 ARTICLE 1. GENERAL PROVISIONS

IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:
“APPLICABLE AGENCY” MEANS A DEPARTMENT OR AGENCY OF THIS STATE ESTABLISHED BY LAW TO REGULATE CERTAIN TYPES OF BUSINESS ACTIVITY IN THIS STATE AND PERSONS ENGAGED IN SUCH BUSINESS, INCLUDING THE ISSUANCE OF LICENSES OR OTHER TYPES OF AUTHORIZATION, THAT THE ATTORNEY GENERAL DETERMINES WOULD REGULATE A SANDBOX PARTICIPANT IF THE PERSON WAS NOT A REGULATORY SANDBOX PARTICIPANT.

“INNOVATION” MEANS THE USE OR INCORPORATION OF NEW OR EMERGING  TECHNOLOGY OR THE REIMAGINATION OF USES FOR EXISTING TECHNOLOGY TO ADDRESS A PROBLEM, PROVIDE A BENEFIT OR OTHERWISE OFFER A PRODUCT, SERVICE, BUSINESS MODEL OR DELIVERY MECHANISM THAT IS NOT KNOWN BY THE ATTORNEY GENERAL TO HAVE A COMPARABLE WIDESPREAD OFFERING IN THIS STATE.

“INNOVATIVE FINANCIAL PRODUCT OR SERVICE” MEANS A FINANCIAL PRODUCT OR SERVICE THAT INCLUDES AN INNOVATION.

“REGULATORY SANDBOX” MEANS THE PROGRAM ESTABLISHED BY THIS CHAPTER THAT ALLOWS A PERSON TO TEMPORARILY TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES ON A LIMITED BASIS WITHOUT OTHERWISE BEING LICENSED OR AUTHORIZED TO ACT UNDER THE LAWS OF THIS STATE.

“SANDBOX PARTICIPANT” MEANS A PERSON WHOSE APPLICATION TO PARTICIPATE IN THE REGULATORY SANDBOX IS APPROVED PURSUANT TO THIS CHAPTER.

“TEST” MEANS TO PROVIDE PRODUCTS AND SERVICES AS ALLOWED BY THIS CHAPTER.

Program purpose:

THE ATTORNEY GENERAL SHALL ESTABLISH A REGULATORY SANDBOX PROGRAM IN CONSULTATION WITH APPLICABLE AGENCIES OF THIS STATE TO ENABLE A PERSON TO  OBTAIN LIMITED ACCESS TO THE MARKET IN THIS STATE TO TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES WITHOUT OBTAINING A LICENSE OR OTHER  AUTHORIZATION THAT OTHERWISE MIGHT BE REQUIRED.

Application process and requirements; fee
ANY PERSON MAY APPLY TO ENTER THE REGULATORY SANDBOX TO TEST AN 34 INNOVATION. THE ATTORNEY GENERAL MUST ACCEPT AND REVIEW EACH APPLICATION FOR ENTRY INTO THE REGULATORY SANDBOX ON A ROLLING BASIS.

AN APPLICATION MUST DEMONSTRATE THAT AN APPLICANT BOTH:
1. IS AN ENTITY OR INDIVIDUAL THAT IS SUBJECT TO THE JURISDICTION OF THE ATTORNEY GENERAL THROUGH INCORPORATION, RESIDENCY, PRESENCE AGREEMENT OR OTHERWISE.

2. HAS ESTABLISHED A LOCATION, WHETHER PHYSICAL OR VIRTUAL, THAT IS ADEQUATELY ACCESSIBLE TO THE ATTORNEY GENERAL, FROM WHICH TESTING WILL BE 43 DEVELOPED AND PERFORMED AND WHERE ALL REQUIRED RECORDS, DOCUMENTS AND DATA 44 WILL BE MAINTAINED.

3 PERSONS THAT ALREADY POSSESS A LICENSE OR OTHER AUTHORIZATION UNDER STATE LAWS THAT REGULATE A FINANCIAL PRODUCT OR SERVICE MUST FILE AN 3 APPLICATION WITH THE ATTORNEY GENERAL TO TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES WITHIN THE REGULATORY SANDBOX.

FOR A SANDBOX PARTICIPANT TESTING CONSUMER LENDER LOANS AS DEFINED IN SECTION, AN INDIVIDUAL CONSUMER LENDER LOAN MAY BE  ISSUED FOR UP TO FIFTEEN THOUSAND DOLLARS, EXCEPT THAT AGGREGATE LOANS PER CONSUMER MAY NOT EXCEED FIFTY THOUSAND DOLLARS. ALL CONSUMER LENDER LOANS ISSUED IN THE REGULATORY SANDBOX, INCLUDING LOANS IN EXCESS OF TEN THOUSAND DOLLARS, ARE SUBJECT TO ALL OF THE FOLLOWING:

Arizona Fintech Legislation 2018
23
Feb

Car Title Loan Lenders Beware: Be Careful When Serving Active-Duty Service Members!

Posted by / Collections

How to Start a Car Title Loan BusinessTitle loan lenders serving active-duty service members NO-NO!

“Department of Justice (DOJ) goes after car title loan lenders and city government for their repossession by tow truck vendors for towing, selling and auctioning active service member automobiles.”

Done right, a car title loan lender can make a lot of money. Done wrong, your title loan business can put you in a heap of pain! Want to avoid the pain? Learn “How to Start a Car Title Loan Business” here: Get Started.

Even city government can screw up when dealing with active-duty service members. A specific example? On June 22, 2015, Chief Petty Officer Hartzog’s military legal assistance attorney sent a letter to Pinky Tows that outlined the facts and applicable SCRA provisions and sought restitution of $22,889.95 for the value of the 1997 Chevrolet S-10 and for the tools and personal items that were stored in the motor vehicle.

The Service members Civil Relief Act (SCRA) requires a person, a car title loan company, city governments… having a lien on a vehicle owned by an active-duty service member to obtain a court order before enforcing a lien.  The DOJ’s complaint alleges that Honolulu and their tow truck general contractor violated the SCRA by towing vehicles belonging to three active-duty service members identified in a complaint and the subsequent disposition of these vehicles without court orders.  The settlement agreement states that a DOJ investigation – launched in response to information provided by military attorneys – revealed that between 2011 and 2016, the city of Honolulu auctioned 1,440 vehicles registered to individuals who identified themselves as service members on city forms during their motor vehicle registration process.

How to Start a Loan Business

How to Start a Title Loan Biz

NATURE OF THE ACTION
1. This action is brought by the United States to enforce the provisions of the Service members Civil Relief Act (“SCRA”), 50 U.S.C. §§ 3901-4043, against the City and County of Honolulu, Hawaii (hereinafter “Honolulu”) and P M Autoworks, Inc. d/b/a All Island Automotive Towing (hereinafter “All Island Towing”) (collectively “the Defendants”) for illegally auctioning, selling, or otherwise disposing of the motor vehicles and personal effects of active-duty service members.

2. The purpose of the SCRA is to provide service members with protections against certain civil proceedings that could adversely affect their legal rights while they are in military
service. One of those protections is the requirement that a person holding a lien on the property or effects of an active-duty service member obtain a court order prior to enforcing the lien. The
court may stay the proceedings for a period of time or adjust the obligations to preserve the interests of all parties.

3. Neither Honolulu nor its contracted towing company, All Island Towing, determines whether the motor vehicles they auction, sell, or otherwise dispose of are owned by active-duty service members.

4. By failing to obtain court orders before auctioning, selling, or otherwise disposing of the motor vehicles and personal effects of protected service members, the Defendants prevented service members from obtaining a court’s review of whether the lien sales should be delayed or adjusted to account for their military service.

5. Since January 1, 2011, the Defendants have auctioned, sold, or otherwise disposed of the motor vehicles of 1,440 individuals who had identified themselves as active-duty service members during the motor vehicle registration process. The Defendants auctioned, sold, or otherwise disposed of these vehicles to satisfy liens without obtaining court orders.

6. Prior to January 1, 2011, Honolulu and/or its contracted and subcontracted towing companies auctioned, sold, or otherwise disposed of the motor vehicles of other active-duty service members to satisfy liens without obtaining court orders.

Here’s the details on one of the 3 cases – the DOJ filed on. Chief Petty Officer Hartzog and his 1997 Chevrolet S-10.

Neither Honolulu nor its current contracted towing company, All Island Towing, determines whether the motor vehicles they auction, sell, or otherwise dispose of are owned by active-duty service members.

Honolulu’s Lien Sale of CPO Hartzog’s 1997 Chevrolet S-10

At all times relevant to this complaint, CPO Hartzog’s motor vehicle was registered in Hawaii. During the motor vehicle registration process, CPO Hartzog completed a non-resident driver form which identified him as a servicemember and exempted him from paying certain state and county motor vehicle weight taxes on that basis.

30. In October 2014, CPO Hartzog was aboard a U.S. Navy ship being transported to his temporary duty station in East Asia. Without his permission, his roommate drove his 1997 Chevrolet S-10 and was subsequently arrested. The motor vehicle was towed by Pinky Tows, a subcontractor of All Island Towing.

31. In early November 2014, CPO Hartzog learned via Facebook that his truck had been towed. On November 5, 2014, he executed a power of attorney onboard the naval ship, designating a fellow chief petty officer as his agent. On the same date, he scanned and emailed the executed power of attorney to his agent in Honolulu.

32. On or about November 11, 2014, the agent took the document to Pinky Tows in an attempt to retrieve CPO Hartzog’s motor vehicle and his personal effects. Pinky Tows refused to accept the power of attorney or release the motor vehicle. Pinky Tows refused to allow the agent to remove valuable tools and personal items from the trunk of the motor vehicle because the agent was not the motor vehicle’s legal owner.

On December 3, 2014, Honolulu attempted to auction the motor vehicle and its contents, but they did not sell. Honolulu released the motor vehicle to All Island Towing, and All Island Towing subsequently disposed of the motor vehicle and its contents. Neither Honolulu nor All Island Towing obtained a court order prior to putting CPO Hartzog’s motor vehicle up for auction or before disposing of the motor vehicle.

34. On February 5, 2015, CPO Hartzog returned from deployment.

35. On June 22, 2015, CPO Hartzog’s military legal assistance attorney sent a letter to Pinky Tows that outlined the facts and applicable SCRA provisions and sought restitution of $22,889.95 for the value of the 1997 Chevrolet S-10 and for the tools and personal items that were stored in the motor vehicle.

36. Pinky Tows responded by letter on July 16, 2015, stating that it had only towed and stored CPO Hartzog’s truck, and that the truck was put up for auction by Honolulu and was scrapped by All Island Towing.

37. On August 12, 2015, the military legal assistance attorney sent a similar demand letter to Honolulu. Honolulu did not respond.

38. The Department of Defense’s Defense Manpower Data Center (“DMDC”) website shows that CPO Hartzog was an active-duty service member when his motor vehicle was towed, put up for auction, and subsequently scrapped. The DMDC is the central source for identifying, authenticating, and providing information on Department of Defense personnel, including verifying  service members’ active duty status.

Here’s a link to the rest of this Case: https://www.justice.gov/

Learn the in’s and out’s of successfully launching, operating and profiting with a Car Title Loan Business: CLICK HERE TO GET STARTED!

How to Start a Loan Business

HOW TO START A TITLE LOAN BUSINESS

02
Feb

Example Bill of Sale for Car Title Loan

Posted by / How to Start

Looking for an “Example Bill of Sale for Car Title Loan” business?

A “bill of sale” is a state or province legal document that transfers ownership of a car, trailer, truck, RV, motorcycle… from one person to another.

It is used in situations where the previous owner retains possession of the vehicle.

A bill of sale is an important part of any vehicle sale; however, it is not the only thing you’ll need to consider.

  • No car title loan is final until you complete a title transfer. Without this step finalized.
  • Many states require a state-specific bill of sale form. In this case, you must fill out the bill of sale form offered by the motor vehicle agency in your state. This list includes some states that require and provide a specific type of bill of sale form when you buy or sell a vehicle:

A bill of sale may be used in a wide variety of transactions: people can sell their goods, exchange them, give them as gifts or mortgage them to get a loan. They can only be used:

  • to transfer ownership of goods that people already own;
  • to transfer ownership of moveable tangible goods; and
  • by individuals and unincorporated businesses.
  • Here’s a link to an example “Bill of Sale:” Bill-of-Sale-Example-81-03
13
Aug

Title Loans: Profits and ROI for Entrepreneurs

Posted by / Profits
How to start a loan business

How to start a loan business

Profits & ROI for a Car Title Loan Business 

An entrepreneur’s perspective.

Let’s begin with a real transaction. We have equity in California stores amongst other states. We do payday loans, car title lending, scrap gold buying and tax services. In one of our locations, a new customer walked-in requesting a title loan on his truck. We determined the “low-book” value of his collateral was $15,000. We loaned $3000 at 9% per month ($270/month) for 36 months with zero pre-payment penalty. If this customer chooses to, he’ll pay us a total of $9720 in fees AND will still owe us $3000 in principal.

[NOTE: If you’ve already invested in our “How to Start a Car Title Loan Company Manual,” simply whip it out and read pages 58 – 59. It discusses car title loan business key business metrics in detail.]

My point? You really don’t need to read any further to grasp the profit potential of a car title loan company.

You can read any daily newspaper and stories like the following will appear:

A single mom in Iowa received a $350 auto title loan for 14 days, paid only the interest portion 8 times with no portion applied to the principal, in total paying $977.

An auto mechanic in Tyler, Texas paid $1211 in interest and fees over 11 months; only having reduced the principal balance by $15.

Burdened by medical expenses, Amy Poormom applied for and received a $500 auto title loan secured by her 1995 Ford Taurus.  This was a loan for 30 days and specified a loan fee of $30 per $100 borrowed.  Amy renewed (paid only the interest/fee of $150) for 12 months.  At this point Amy had paid a total of $1800 in interest/fees while still owing a balance of $500.

Of course, the “mean” auto title loan company repossessed Amy’s car (which she needed for work) and sold it for $750 at an auction.  Now Amy can no longer get to work.  Amy lost her job.  Worry and stress put her in the hospital.  Now, the hospital is suing her for non-payment; she has no job so she has no insurance.

What is not mentioned or even considered is that Amy Poormom needed the initial car title loan because no one in her family was willing to provide her with the $500 she needed for tires and brakes on her car.  The auto title loan company actually enabled her to gain another 12 months to get her life back on track.  It could be said that had the auto title loan company not come to her aid and provided some hope for Amy, the ultimate outcome would have come earlier.  Perhaps the family should have performed an intervention to help her with her crack habit. 

Ok, if you’re reading this you may think we are getting carried away.  But these are real-life events. 

ENOUGH OF THIS!

Back to profits.

States and provinces having specific auto title loan statutes and fee structures typically prescribe 3% – 30% per month on the principal loaned; 25% being the average in the USA.  Thus, a $1500 loan for a 30 day title loan could yield total interest payments of $45 to $375 with no portion applied to the principal.  Thus, if after 6 months, the title loan consumer continues to “roll-over” this title loan they will have paid as much as $2250 in fees/interest.  The balance due on their car title loan would remain $1500.

$500.00 borrowed for a 30 day term will typically cost $125 including miscellaneous fees.  The actual range is roughly $75 to $190 depending on the state/province and the exact circumstances of the title loan borrower.

After you enter the car title loan business, you’ll be pleasantly surprised by the number of customers who will have a late model Lexus or Mercedes.  It’s amazing how many people receive settlements and use the proceeds to purchase a new luxury car.  Later they experience cash-flow problems and need your help; and they have the title to their car!

Even in a state like Florida where the statutes prescribe an interest rate of 30% per annum, it’s a simple matter to put $250,000 “on the street” in auto title loans.  This would yield a gross of $75,000/year versus a CD earning $2,500 (1% annually).

These car title loan clients may not be totally bereft, but they are in trouble and are willing to borrow money at interest rates dwarfing those of a conventional bank loan; ranging from 17 percent a month (204 percent APR) on $500 or less to 10%, 20%, 30%  percent a month  on more than $5,000.

“Your job is your credit” rings very true in our industry; the business of lending money on car titles.  We have a Texas operator having 300 people bringing him $40 per week.  That’s $12,000 per week!  If the car breaks down, he has it fixed and adds it to their car loan.

A great number of auto title loan lenders add on several fees to improve their ROI’s and provide incentives to their title loan clients to pay on time.  These include but are not limited to:

  • A $15 fee if a collection letter must be mailed to the title loan consumer
  • A $25 returned check fee
  • Late fees (5% is typical)
  • Should a collector be sent to their door, a $50 to $100 fee is imposed

Deficiency fees are collected should a sale of the vehicle yield less than the amount owed on their title loan.

Want to know more? Learn how to start a car title loan business. Invest in our “How to Start a Car Title Loan Business Manual” now. In 30 seconds you’ll receive a link to download it in Adobe Acrobat [PDF] and begin your journey. Click Here!

Title Loan Business

Title Loan Business

13
Jun

Start a Georgia Car Title Loan Business

Posted by / Georgia, Title Loan Laws

Georgia Title Pawn & Title Loans

How to open a car title loan business in Georgia

Governments move links often. If you encounter any broken links, start your research here: http://dbf.georgia.gov/

If you follow the advice offered in our “Car Title Loan Manual,” you’ll get a title loan here as part of your research: http://www.titlemax.com/georgia-title-loans/

The state of Georgia refers to car title loans as title pawn transactions.

Georgia Vehicle Registration: http://dor.georgia.gov/vehicle-registration

Georgia Title Loan legislation specifically authorizes “title pawns” as a type of pawn transaction.

A Georgia pawn broker may:

  • Charge interest and charges of up to 25% of the principal amount for each 30 day period during the first 90 days of a title loan.
  • Transactions extended beyond 90 days may be charged for each 30 day period interest and pawnshop charges which together equal no more than 12.5% of the principal amount advanced with a minimum charge of $5.00 each 30 days.

Georgia lawmakers passed the current title pawn bill authorizing lenders to charge an annual percentage rate that amounts to as much as 300 percent.

A quote from the Georgia Department of Banking & Finance:

“Some consumers turn to pawnshops and title lenders when they are in need of emergency cash or a short-term loan. It should be noted that the Georgia Department does not regulate these types of businesses.

Depending on jurisdiction, city or county ordinances outline specific requirements for licensing and supervision of pawnshops in Georgia. Local police departments/public safety departments are typically responsible for supervision of pawnshops in their jurisdiction and often handle the licensing process as well.

One of the primary purposes behind handing supervision of the Georgia title loan industry over to law enforcement agencies is to allow them to review pawn data for stolen property.

Section 44-12-136 of the Official Code of Georgia Annotated (O.C.G.A.) provides for the supervision and licensing of pawnbrokers by municipalities.

Title Loan Business

Title Loan Business

Again, in Georgia, the interest rate car title loan companies are allowed to charge is capped by law at 25 percent monthly (300 percent annually) for the first three months and 12.5 percent monthly after that (150 percent annually). This means a combined maximum yearly interest rate of 187.5 percent.

In the case of title pawn, Georgia law [O.C.G.A. Section 44-12-138(b)(3)] requires the pawnbroker to provide title loan borrowers the following written statement when a borrower pawns their vehicle: “Failure to make your payment as described in this document can result in the loss of your motor vehicle. The pawnbroker can also charge you certain fees if he or she actually repossesses the vehicle.”

Again, the Georgia Department of Banking and Finance DOES NOT license or have any jurisdiction over car title loan lenders, pawnbrokers or pawn transactions.

09
Jun

Texas Payday Loan & Auto Title Loan Business

Posted by / Profits

Texas Payday Loan & Auto Title Loan Business

Texas payday loans and Texas auto title lending can be very profitable IF you remember that the business of lending money to make money is really a COLLECTIONS BUSINESS!

As we stress in our “How to Start a Title Loan Business Manual” and in our stores and when performing consulting work with our clients, the collection process begins the moment the lender begins a conversation with the borrower.

The lender must “look” for key phrases, terminology, and triggers that set off alarm bells; this borrower will NOT pay me back as agreed! For details, read our Manual or opt in to our free Monthly Newsletter. [It’s over there on the right side of your screen.]

Texas Payday Loan & Auto Title Loan Business

Texas Payday Loan & Auto Title Loan Business

07
Jun

Car Title Loan Marketing Ideas: Windsor Financial

Posted by / Marketing

Car Title Loans: All the pundits think it’s easy to make a fortune lending money to consumers in return for the title to their automobile, motorcycle, RV, boat… After all, successful transactions can easily top 200%+ Annual Percentage Rates (APR).

WRONG!

It is easy for title lenders to give their money away. But, there are two issues we must deal with first:

  • How do car title loan lenders rise above all the other lenders and come to the attention of potential borrowers?
  • Collections: how do we get the borrower to pay us back the loan principal in a timely fashion without the need for us to drive the borrower nuts with text messages, phone calls, emails, letters, personal visits, license plate technology… and on and on?

I’ve addressed these topics in many previous Posts. So… I’ll focus on a simple marketing piece I received today from Windsor Financial; a car title loan lender here in California.

I think it’s a nice piece. My iPhone image does not do it justice. It’s clean, bright and to the point; inspite of this poor image – my fault 🙁

Bottom line? Our consumer is often confused! They’re bombarded with TV, radio, direct mail, social media, texts, phone calls… They hear terms like “personal loan, cash advance, debt reduction, installment loan, line-of-credit loan…”

Our answer? Be direct! Keep your marketing IP simple and clear. Quickly communicate to your car title loan borrower what you do and how they can easily do business with you; a “clear call to action.”

PS: If you’re a title loan borrower in the Los Angeles area, see my friends at Windsor Financial! Good folks!!

Car Title Windsor Financial Marketing Piece

Car Title: Windsor Financial Marketing Piece

05
Jun

GPS Devices for Title Loan Lenders

Posted by / Collections

Complaint alleges that title loan lender used GPS tracking devices without consumer’s knowledge or consent to conduct repossessions of vehicles.

Florida Attorney General Pam Bondi’s Office obtained a consent order to resolve a complaint filed against a Jacksonville car dealership and its president regarding the dealership’s misleading business and sales practices. The complaint alleges that Beach Blvd. Automotive used GPS tracking devices to track hundreds of purchased vehicles without consumer’s knowledge or consent to conduct unconscionable repossessions of vehicles. The defendants also allegedly created fake online profiles and, without consumer knowledge, used consumer data to post false positive comments online about the dealership.

Do not let this happen to you! All your car title loan contracts should contain a consumer acknowledgement of the GPS device your company installs; 10 point fonts at a minimum are recommended. Refer to our sample “GPS Consumer Disclosure” in  our “Car Title Loan Manual” for an example.

Additionally, our “Title Loan Manual” provides contact information for a multitude of GPS device vendors.

Car Title Loan ProfitsAccording to the Florida AG complaint, “Beach Blvd. Automotive, its exclusive financing arm, Beach Blvd. Auto Financing, and John O. King, Sr., attempted to collect non-existent debt from consumers and threatened to use force to repossess purchased vehicles. The defendants allegedly increased consumers’ monthly car payments by adding optional items to the sales transaction without proper disclosure to customers. On several occasions, the defendants did not honor a promised warranty and, in some instances, charged a $399 pre-delivery inspection fee for an inspection never conducted.”

“The agreed-upon consent order requires the defendants to modify business practices and provide more than $5 million in debt forgiveness to consumers. As part of the consent judgment, the defendants will also refrain from making reports to the credit reporting agencies for consumers whose accounts are covered under the consent order. The consent order provides that within 60 days of the order’s entry, the defendants will provide equitable monetary relief, such as debt forgiveness, with a value of more than $5.1 million to certain former and current customers with covered accounts. In addition, BBA will pay $2,500 in consumer redress relating to certain binder deposits made by consumers and will also pay more than $280,000 for attorneys’ fees and court costs.”

Need help starting a car title loan business? Begin here: “How to Start a Title Loan Business via a storefront or the Internet.”

Here’s a link to the Consent Order: Florida AG on Car Title Loan Complaint

Jer Ayles

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